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Nick Doble, Area Manager Partner Services at Booking.com, Revenue Optimization Advisory Board Member
We’ve all struggled with budgeting and forecasting. From misaligned industry predictions to unrealistic owner expectations, this resource-intensive process poses many challenges. I brought this topic to the Revenue Optimization Advisory Board to discuss strategies to make the budgeting and forecasting process more efficient, realistic, and aligned with both industry trends and stakeholder expectations.
Identified Challenges:
- Misalignment of Industry Predictions: Industry predictions often do not coincide with the budgeting timeline, leading to discrepancies and unrealistic forecasts.
- Resource Intensive: The budgeting process ties up significant resources, diverting attention from revenue-generating activities.
- Owner Expectations: Misaligned expectations between hotel management and owners can lead to last-minute changes and inefficiencies that could be avoided.
- Inflexible Forecasting: Fixed revenue targets based on current forecasts can lead to unrealistic budget expectations, especially if initial forecasts are overly optimistic.
Potential Solutions:
- Frequent Updates: Industry predictions should be updated more frequently to align better with the budgeting process, ensuring more accurate forecasts.
- Streamlined Meetings: Breaking the budgeting process into shorter, more frequent meetings can reduce the time spent on revisions and ensure continuous alignment among stakeholders. As well as ensuring all relevant stakeholders are at the table.
- Year-over-Year Growth: Focusing on year-over-year growth percentages rather than fixed revenue numbers can provide a more flexible and realistic approach to budgeting.
- Early Owner Engagement: Engaging owners early and frequently in the budgeting process can help align expectations and reduce the need for extensive revisions later on.
Further Reading
Five Tips to Improve Hotel Forecasting
What are the best ways to streamline the budgeting process?
How do you use your influence to drive change?
Questions for Your Team
- What are the key issues?
- How can we influence change to streamline/ fix the budgeting and forecasting process?